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A Student Debate: Are There Absolute Truths About Money and Personal Finance?

 

Truth written on notebook paperA philosophical debate in the existence of absolute truth sounds like a discussion for theology class. In fact, that’s what has been taking place in one of the Bible classes I teach at our private Christian school. The questions we have been exploring are polar opposites of one another:

“Is there an absolute truth that is valid for all people regardless of era, culture or circumstance?”

Or…

“Are all things relative? Does truth exist only in the person’s individual experience and based in their view of reality?”

Deep, I know.

I’ve been thinking about this for some time in relation to personal finances. To fully disclose, I do believe in absolutes and think they can be found in many areas of life, especially in mathematics and the sciences. Absolutes do not have to be limited to theological discussions.

So why can’t there be absolutes about money and the personal finance world – things that are universally true for all people no matter the culture or circumstance?

You may be shaking your head at that idea ready to fire back the “personal finance is personal” line I read so much in the personal finance blogosphere. (Don’t come down on me too hard…I’ve said that phrase as well and believe it on many levels.) However, for someone like me who believes in absolutes, it’s tough to conceive there to be none in relation to money. There has to be at least one concept that everyone agrees to be true.

So I posed this question to my 10th and 11th grade personal finance class the other day – “Are there absolute truths when it comes to money and personal finance?”

After some debate, we came up with four such statements. Before I reveal those, here are some areas that were mentioned in class where we ultimately decided there was no consensus of absolute truth:

1. Whether debt is good or bad.

2. Using a credit card or a debit card and cash for purchases.

3. How much to put in an emergency saving fund.

4. Whether or not a monthly budget is necessary for success.

5. In what to invest (single stocks, index funds, managed mutual funds).

6. Home ownership – whether to rent or own.

7. Taking out loans for college.

8. Whether or not to combine finances in marriage.

9. Giving kids an allowance or making them work at home for money.

10. How much to carry for car, home, or life insurance.

11. How much is an adequate amount to save for retirement.

Each one of those is debatable, with good people disagreeing on which side of the fence to fall.

These next four statements however, represent what we determined to be absolute truths in relation to money, at least as close as we could possibly come:

1. If you continue to spend more than you make or have you will be broke.

2. You can’t take it with you.

3. Nothing is free. Everything costs something.

4. The love of money is the root of all kinds of evil.

As I said previously, I can get on board with the ideal that many personal finance issues depend on the person’s situation. There are items on which people disagree as to the proper course to take. I’m inclined to think however, these last four statements represents absolutes on which we can all agree.

The class and I would love to hear your take on this topic.

Do you believe in absolutes in relation to money? Is there an argument to make against these four statements? Can you think of any more absolute truths that are universally accepted?

Image at FreeDigitalPhotos.net

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Comments

  1. 1-3, I can support fully, but 4. The love of money is the root of all kinds of evil. While I tend to agree, that the love of money or rather a passionate pursuit of money is the root of all kinds of evil, it’s not just money. The passionate pursuit of anything tends to be the root of all kinds of evil. All I’ll say to that is: Lance Armstrong. But the passionate pursuit of anything also tends to be the root of good developments also. It’s a Yin/Yang relationship. And like the problem: if you love deeply, you will likely be hurt at some point, but does that mean you don’t love to begin with? People’s passionate pursuit of money can cause pain to some people, but helps other’s. I hope one day people realize that we are all interdependent and that “winner takes all” ends up hurting the “winner” in the long run. I see some “winners” waking up to that fact.

  2. What a great debate! I do think there are absolute truths, and the most important being spend less than you earn! I don’t think anyone could ever convince me otherwise.

  3. Done by Forty says:

    Deep stuff, Brian! I think The Richest Man in Babylon touches on some other truths I think border on universal, though they’re probably more debatable than the four you listed.

  4. John S @ Frugal Rules says:

    Sounds like a great discussion Brian! I would have to say that I would have to agree, for the most part, with those four. It might have different shades for some I would tend to say that they would apply to the majority of people out there. I would also agree with Laurie about the borrower is servant to the lender. I know it can be argued that debt can be used for “good” like buying a house, getting a degree, etc. but the nitty gritty of it is that debt is making you a servant to the one giving you the money to do whatever it is. Far too often we don’t view it that way and unfortunately it’s to our detriment in many occasions.

    • “…the borrower is servant to the lender…” In my worldview, that’s an absolute. But I know too many people disagree with that to list it in the absolutes category.

  5. Great post and discussion. Really makes you think. I think I would agree with everything but #4. It’s more open-ended to me than that. I CAN be evil if all you DO love is money, and it negatively affects other aspects of your life, but I do LOVE what money can provide: security, good, nutritious food, nice shelter, etc.

    • I don’t disagree with your assessment of #4. Of all this list that’s the most open-ended in people’s mind. Like I’ve mentioned to others, we viewed the love of money being a pathway to evil, not necessarily causing it for sure.

  6. Mike GetRichWithMe says:

    You cant take it with you – well that depends on your beliefs
    My belief is that you achieve immortality through your children and their children – so the thought of being able to pass on wealth to my children gives me great comfort

  7. I agree with the four truths that you point out at the end, but I also think there are many things that are highly “personal” when it comes to finance. Taking on debt may be bad for one person but make sense in another situation. Home ownership might be right for one person but wrong for another. The list goes on, and it all has to be taken in context of each individual.

  8. Just to throw some more discussion on your absolutes you came up with, I think in general you are right. But, just maybe there are some exceptions. It might depend on your definitions of certain words though…

    For #1, spend more than you make you will end up broke. What about people that inherit money? I’m betting Paris Hilton has spent way more money then she has ever earned. But then again, lets take this into perspective, are we talking about what she earned by public appearances or TV? or do we count what money she has invested that was handed down to her to? I guess it depends on your definition of how she “makes” money.

    For #2 you can’t take it with you. Well what about the Egyptian pyramids? Those were built for the pharaohs to take their riches with them to the afterlife. They were buried (or I guess mumified is more accurate) with their riches, and even with some of their workers to help them in the afterlife. Granted it’s up to debate on the whole philosophy of the afterlife and if they actually “took” anything with them, but that’s a completly different discussion. I think they did an amazing job of “taking it with them”, for centuries they held onto what was theirs. I bet if you were rich enough (say warren buffett rich) you could arrange to shoot your body into space (or perhaps the sun) in a gold coffin. I’m sure with over 50 billion he could find a way to work that out. (not that I think he ever would care to)

    • Interesting that you mentioned those issues on positions 1 and 2. Both scenarios were brought up in class when we talked about it. In relation to #1, we decided that if the person who inherited money or won the lottery continued to spend what they had, without any other form of income, they would end up broke. On position #2, we decided that since the actual artifacts have been found encased with the mummies and in their tombs, that was proof the artifact didn’t go physically go with them to the afterlife. At least that was the student’s reasoning. Good discussion for sure.

  9. Cashville Skyline says:

    Great post, Brian! Sounds like a fascinating group of students to teach. Perhaps there are times that you need to spend more than you make to get ahead – an example may be when you’re starting out and trying to establish a reputation professionally. Maybe it’s necessary to dress better than you can afford, but it will lead to a higher paying position in the future.

    • That’s a good point Addison. I can see those scenarios being necessary for someone to move forward. I think they would be short lived though, not something that extended for a long period of time.

  10. MoneySmartGuides says:

    That is so true! It is so hard to make an sort of definitive statement about money that is true to everyone. One truth may be the case for 1 person and could be completely false for their neighbor!

    • I’ve been thinking about this for some time as I believe there are absolutes we can bank on. It didn’t make sense to me there wouldn’t be at least one related to money.

  11. Natalie @ Financegirl says:

    You have some deep thinking students, Brian! I love this! Personally, I think the first three are no-brainers. As for number four, I’m a bit on the fence; the philosophy minor in me is debating it in my head! 🙂 I’m reminded of T. Harv Eker, who says “money just makes you more of what you already are.” That said, no doubt about it that money is at the root of so many issues! More importantly, I think it’s really amazing that your students are already learning about this stuff now! Great topic.

    • I think that quote by Eker is spot on. It certainly does enhance who/what we already are. That statement of course comes from the Bible which is part of what the kids learn at our school.

  12. I couldn’t agree more. There are absolute truths that apply to all, then there is the personal. I think personal finance is personal because there are so many variables. The absolutes, however, don’t change.

  13. As I started reading this, I was going to say #1 about living below your means. I think if you can always do that, you’ll be OK and your standard of living will adjust to what you make. That’s a great discussion to have with kids. Sometimes, you expect them to have all sorts of wrong ideas, but it seems they are pretty well informed.

  14. I bet that was a fascinating discussion with your students and I love that you challenged to really think about how they view money. I agree with the absolutes with the exception of #4. I believe that it can be true and sometimes in the world we currently live in that it appears to be an absolute truth. However, I love money, although admittedly in a different way than I love my husband and kids. I love it because I see it as a gift, not a burden, and use it in a manner that aligns with my values and goals and to serve others. I believe money becomes a problem when we are not the ones in control of our money and let it control us. Love, love the fact that you’re students are getting this type of education and wish it was happening at more schools.

    • I agree with your perspective there. I think what they were getting at was that the love of money can serve as a gateway to evil, not that everyone who loves money will do evil.

  15. This is great Brian and I am in the camp of believing like your class that there are some topics that are relative and others that are absolute truths. We are all unique and special people so to say that we all have to practice certain things financially just seems silly to me. I advise clients all the time and even though they are all trying to get to a similar end destination, they all need to take different routes based on their individual situations.

    • Where not going into debt may be an absolute for me, it’s not for many others (which makes it then a relative concept). I was really proud of them for seeing the difference on some of these things.

  16. Love this post Brian what an interesting point of view and good fot you for encouraging such yoing kids to think about it.

    Absolutes:

    Spending more than you earn can only lead to bad things (debt, stress etc).

    You absolutely need to understand how your money works (how much you make, where it goes, how to save etc) or else you will end up in a bad situation.

    I don’t think the love of money always leads to evil things. It could be argued i love money in my account now but im using it for positive means (payong debts off etc). I think the means in which people abuse the power of money can lead to evil (super rich not helping less fortunate, trying to compete with others for personal gains only etc). Money isn’t evil, but peoples motives with money can be evil.

    • “I don’t think the love of money always leads to evil things…” I’d agree with that statement and that money in itself is not evil. Maybe it’s the depth of love that matters. Puppy love vs. deep, passionate love? Either way, I think the love of money serves as a vehicle that moves us in evil’s direction. We have to fight against that everyday.

  17. That must have been a fun class to teach, and it certainly takes me back to my philosophy classes in college. I think those four make sense, though. I also like Laurie’s comment!

  18. Hi Brian, I like those four absolute truths and would add:

    (5) All wealth is relative wealth.

  19. Laurie @thefrugalfarmer says:

    Interesting, Brian!!! I’ll bet that was a super fun and interesting discussion with the kids. The good debt/bad debt discussion always leads me back to Proverbs 22:7. That verse always has me leaning on the side of the absoluteness of debt in general. Your thoughts?

    • “The borrower is servant to the lender…” Ooh…I like it. Should have thought of that one. I would say that thought is pretty much an absolute. Some may be OK with that type of debt arrangement, feeling that it is allowing them to buy things they need or pursue a better life. I would say those with a spiritual conviction towards the teachings of the Bible may feel the weight of that verse more heavily than others.

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